



v***^ 




A Tentative Report 






TO THE 






VIRGINIA 






EDUCATION 






COMMISSION 






ON 



A Mill Tax for the Educational 
System of the State 



BY 

CHAS. G. MAPHIS 
Secretary 






A Tentative Report 



TO THE 



VIRGINIA 
EDUCATION 
COMMISSION 



ON 



A Mill Tax for the Educational 
System of the State 



BY 

CHAS. G. MAPHIS 
Secretary 



The Michie Company, Printers 

Charlottesville, Va. 

1910 



1^1 OV B m^ 









Charlottesville, Va. 

Oct. 7, 1910. 
Dr. E. A. Alderman, 

Chairman Virginia Education Commission. 

Sir: 

Pursuant to instructions, I submit herewith a preliminary and 
tentative report on a Mill Tax for the Support of the Educa- 
tional System of Virginia. 

In compiling the report I have used all the information I 
could gather from every source available to me. I have not 
found it practicable to give credit for each item of information, 
though in some instances I have used the exact language of 
others. 

Respectfully submitted, 

Chas. G. Maphis, 

Secretary. 



THEORY ON WHICH TAXATION FOR PUBLIC EDUCA- 
TION IS BASED. 



Introduction. 

Herbert Spencer in 1850 announced the doctrine that the tax- 
ation of one man's property for the purpose of educating an- 
other man's children is robbery, and that the state has no more 
right to administer education than it has to administer reHgion. 

Legislation, both in Europe and in this country, has in a 
practical way completely refuted this doctrine. In the evolution 
of the democratic idea of government, education early found a 
place. A larger view of the functions of government than that 
of mere police protection to which Spencer's doctrine would 
limit it, has been expressed in child labor laws which take away 
from the parent the right to enslave his children, rigid health 
measures and various other enactments of similar character, 
designed not so much for the individual, but for the protection 
of society and the welfare of the state. 

The civilized world today has, in the matter of public educa- 
tion, rather followed the dictum of Macaulay that, "Whoever 
has the right to hang, has the right to educate." 

In practice it chooses to be guided by the wisdom of 
Thomas Jefferson, first of English speaking statesmen, who per- 
ceived the true meaning of education as an influence molding 
state and national life. According to Lord Macaulay he was the 
foremost statesman in the world in the clearness and complete- 
ness of his conception of universal education. Jefferson said, 
"I look to the diffusion of light and education as the resource 
most to be relied on for ameliorating the condition, promoting 
the virtue, and advancing the happiness of man. A system of 
general instruction which shall reach every description of our 
citizens, from the richest to the poorest, as it was the earliest, 
so it will he the latest of all the public concerns in which I shall 
permit myself to take an interest. Educate and inform the 



6 REPORT ON MILL TAX 

whole mass of the people. No other sure foundation can be de- 
vised for the preservation of freedom and happiness." He also 
regarded it as an economic question for he says further, **If the 
children are untaught, their ignorance and vices will in future 
cost us much dearer in their consequences than it would have 
done in their correction by a good education." 

The modern accepted theory of the state, then, assumes that 
the government not only can levy taxes for the establishment 
and maintenance of schools, but it is just as much its duty by 
this means to protect itself against ignorance and its conse- 
quences as it is to protect itself against paupers by maintaining 
almshouses, or against criminals by providing jails and peniten- 
tiaries. A democratic community can not endure without ade- 
quate provision for the training of all its citizenship in intelli- 
gence, in character, in leadership and in economic efficiency. As 
a matter of life and death, therefore, the State undertakes to 
train its children. An educated citizen is a more valuable asset 
to the State than an ignorant one. He will produce more rev- 
enue and be less likely to become a liability. It is only on the 
ground of an investment — an economic necessity — that the State 
can justify the imposition of taxes for public education. Public 
education, then, is after all, an exercise by the government of 
the police power, even if not so recognized by Spencer. It is 
in addition a great social and economic effort. 

"The ability of this generation to recognize education as some- 
thing larger than mere learning or even discipline, to perceive it 
as a great force molding national character" is, in the opinion 
of our chairman, one of the wholesome signs of the times. 

Instrumentalities for Administering Public Education. 

In the educative process certain well-defined and clearly es- 
tablished steps are necessary. Formal education begins with the 
elementary school and ends with the graduate school of the Uni- 
versity. The great instrument for this training we call a system 
of schools. A school system, therefore, is a great social agent of 
the State, and the parts that compose the whole are simply sub- 
agents in one great educative process. 



REPORT ON MILL TAX / 

By common consent and general practice, Jefferson's scheme 
for a complete educational system for all the people has been 
adopted in this country. That plan provides for 

a. Public Elementary Schools. 

b. Public High Schools. 

c. The University. 

In addition to these our system of Schools in Virginia now in- 
cludes the Normal Schools, and the group of technical schools — 
Virginia Polytechnic Institute and Virginia Military Institute. 

Later I shall attempt to define the peculiar function of each of 
the several groups above named. For the present phase of the 
discussion of the subject, that of support, it will be sufficient now 
to observe that education in a state is really one thing, from the 
elementary grade to the graduate school. Each part, whether 
it be under state control or private control must in the long 
run, relate itself to the system of public instruction. "Any ef- 
fective school system must be an organism, instinct with life, 
growing and developing harmoniously in all its parts, each part 
receiving its due portion of nourishment and life blood, and each 
performing its proper function in relation to every other part, 
and to the whole body. Any other conception can result only 
in waste of funds and disappointment in results. Each part 
must be a co-operating part and not a competing part." 
To organize, maintain and develop such a system should be the 
chief interest of the state which hopes for large developments, 
social and industrial. 

"For the South as a whole 40 ^ of the public revenue is de- 
voted to the business of education. Clearly, then, education is 
the State's chief business." In Virginia, 35.8 % of the total 
revenue in 1909 was expended for maintenance alone, exclusive 
of the amount spent for buildings and improvements which, if in- 
cluded, would bring the proportion to over 46 ^. These figures 
apply only to state revenues. Through local taxation a sum al- 
most equally as large is raised for the public schools. 

Financial Support of State Schools. 
In view of the above facts and generally accepted theories, 



8 REPORT ON MILL TAX 

it is the manifest duty of the state to adopt a method of main- 
tenance which will lend itself most readily to the desired ends. . 

For this purpose the Commission was instructed by the Gen- 
eral Assem.bly to devise a stable and systematic method for the 
maintenance of a state school system. 

There are four methods of support now being used: 

1. Biennial appropriations, 

2. Annual appropriations for a term of years, 

3. An appropriation based on the valuation of property, 

4. An appropriation of a fixed percentage of the total gross 
revenues of the state. 

The latter method is used in but one state — Tennessee. 

It is my belief that an appropriation based on property, com- 
monly called a mill tax, is the best of these methods. 

Sixteen states have adopted this method of support for one or 
more of their educational institutions, and twenty-one out of 
eighty-three state universities and other institutions of higher 
education are supported in whole or in part by a mill tax. 

I have communicated with the Presidents of all the institutions 
thus supported, and with state school officials and others in a 
position to render an opinion after observing the practical oper- 
ation of this method of support, and without exception they 
commend it as the most satisfactory plan known to them. 
I shall not incorporate their replies in the body of this report 
lest it be too lengthy, but I append to it as "Exhibit A" selected 
extracts from the letters received, setting forth the advantages of 
the method as it appeals to each of the writers. I am induced to 
do this in order to forestall any claim that might be made by an 
■objector to the plan on the ground that it is plausible but 
theoretical. While the reasons given are such as readily occur 
to one on reflection, it is interesting and helpful to know that 
they commend themselves to these leaders in educational 
work after practical trial, in which the theory has been verified. 

Summarized and briefly stated, the arguments for the mill 
tax method of support are as follows: 

1. As stated above, experience proves that the millage method 
is the best one. Sixteen of the most progressive states support- 



REPORT ON MILIv TAX 9 

ing twenty-one of the most prosperous institutions have adopted 
it and after having had an experience with it, pronounce it the 
best. Following are the list of states, names of institutions, rate 
of tax and amount of revenue produced: 

Annual 

Rate Term Yield 

University of Arizona 3/5 mill continuous $ 32,000 

University of California 23.5/100 " 750,978 

University of Colorado 2/5 " continuous 150,000 

Colorado School of Mines 1/5 " " 73,000 

University of Indiana 1/10 " " 160,000 

University of Purdue 1/10 " " 173,088 

Kentucky A. and M 1/20 " perpetual 47,000 

University of Michigan 3/8 " continuous 650.287 

Michigan State Agri. Col 1/10 " 173,410 

University of Minnesota 23/100 " continuous 260,000 

University of Nebraska 1 " " 411,968 

N. Dakota Agri. College 1/5 " . " ' 56,000 

University N. Dakota 2/5 " " 92,600 

Ohio University 1/25 " " 93,000 

Ohio State University 16/100 " " 360,000 

Miami University 7/200 " " 88,450 

University of Wisconsin 2/7 " " 664,657 

University of Wyoming 3/8 " " 24,000 

Colorado Agri. College 1/5 " 

Tennessee 25% of total revenues for all ed- 
ucational purposes. 

The University of California has a rate for building of 
7.5/100 mill with a continuous term and total yield of $133,000. 
Iowa A. and M. has a rate for building of 1/5 mill with a term 
of 5 years and a total yield of $135,799. The University of 
Iowa has a rate of 1/5 mill for building with a term of 5 years 
and a total yield of $650,000. Michigan State Agricultural 
College has a total yield of $129,422, for buildings. 

2. It enables the institutions or system thus supported to have 
a fixed policy which shall be in force for an indefinite period, and 
to make far-seeing and wiser plans for future growth and needs. 
No consistent educational policy can be carried out without some 
degree of dependence upon a certain income. The administra- 
tive officers must have some reasonable anticipation of the funds 



10 REPORT ON MILI. TAX 

which can be commanded for use, if they are to plan wisely and 
economically. 

Private institutions have an endowment and hence an assured 
income, which, while not often sufficient, is always certain. The 
mill tax amounts to a permanent endowment with the state be- 
hind it. 

3. It produces a constantly increasing revenue while private 
endowments, desirable and helpful as they are, produce decreas- 
ing returns on account of lower rates of interest. 

The revenue from a mill tax is certain to grow somewhat 
from year to year and to grow very considerably when long 
periods of time are taken into consideration. In Minnesota, for 
instance, it has doubled in the last ten years. 

Experience in other states has shown that the amount of reve- 
nue will increase with the increase in the wealth of the state 
and in proportion to the growth and needs of the school system. 
It does not always keep up with them, but nearly every state 
which has had a mill tax for any length of time has not only 
continued it, but has increased it, one or more times as the needs 
have demanded. A fixed appropriation continually becomes in- 
adequate, and it is difficult to get it increased. 

4. It gives stability to the business efforts of a school system, 
which could not be expected at all if it depended on an annual 
or biennial presentation of the needs to the Legislature. 

5. It provides a stable support in times of financial depression 
and eras of politicalism, such as we had in 1879, when the total 
school revenue fell from $1,000,000 to $512,000, and is there- 
fore, a more scientific and practical method of support. 

6. It prevents constant and undignified lobbying throughout 
the session of the Legislature, and avoids the unseemly biennial 
scrambles and unpleasant rivalry among the several state insti- 
tutions before the legislative committees. 

7. It saves much time and annoyance to the legislators them- 
selves by relieving them of the importunities of a most persist- 
ent and numerous class of lobbyists, and prevents ''log-rolling" 
and "wire-pulling" among representatives of different parts of 



REPORT ON MILIy TAX 11 

the state when one institution is, as it usually is, played against 
another located in a different part of the state. These rivalries 
often lead to unnecessary duplication of work intended only to 
appeal for an appropriation. 

8. It adds to the dignity and self-respect of the school men 
themselves by relieving them of the necessity of engaging in this 
unwilling, unpleasant, but necessary struggle for existence, 
which is an unwise use of the time, energy and ability of the 
president, trustees, and friends of an institution, and puts a 
premium on political leadership rather than educational leader- 
ship. The general progress in this country is toward academic 
freedom and the elimination of politics from education. 

A.ccepting the foregoing arguments, I have made a study of 
the needs of the school system of Virginia, and the resources 
and revenues of the State with a view of making a practical 
recommendation of the millage tax for its support, with the fol- 
lowing results : 

The present sources of taxation for school purposes and the 
yield from each in 1906, 7, and 8, are : 

1906 1907 1908 

Banks $ 33,871.63 $ 37,44^.15 $ 36,468.92 

Express Companies 42.84 48.72 56.32 

Personal Property 130,187.14 129,328.55 128,904.93 

Railroads and Canals 80,413.19 89,788.59 92,555.59 

Real Estate 333,313.15 361,133.13 348,256.17 

Steamboat Companies 1,149.29 1,219.11 1,194.11 

Telegraph and Telephone.. 2,069.70 2,362.27 2,529.76 

$581,046.94 $ 621,232.52 $ 809,965.80 

Capitation 377,219.74 421,339.27 405,217.05 

Total $958,266.68 $1,042,571.79 $1,015,182.85 

The assessed valuation of property in Virginia was : 

1900 $481,885,487.86 

1902 502,902,003.56 

1904 536,291,693.07 

1906 600,718,050.85 

1908 668,049,467.00 



12 REPORT ON MILL TAX 

Warrants to public schools from these sources of taxation: 

1907 $ 901,052.83 

1908 1,035,635.01 

1909 1,025,559.50 

The following table will show the receipts of government 
during the last three fiscal years, while the appended summary 
will show the chief source of revenue: 

Total Receipts, fiscal year 1907 $5,250,468.66 

Total Receipts, fiscal year 1908 5,526,616.43 

Total Receipts, fiscal year 1909 5,536,481.04 

Revenue Fiscal years 1909, 1908, 1907. 

1909 1908 1907 

Banks $ 127,641.25 $ 129,669.22 $ 118,545.48 

Capitation 405,217.05 421,339.27 377,219.74 

Court Taxes 224,434.23 185,211.65 226,028.95 

Inheritance Tax 39,421.91 38,397.28 23,129.36 

Delinquent Lands 48,810.93 40,752.64 45,921.62 

Fines 73,825.32 76,596.96 87,844.79 

Franchise 111,083.00 104,265.00 103,675.00 

Income Tax 102,810.50 122,047.09 95,110.39 

Insurance 169,240.48 167,626.37 156,772.76 

Insurance Bureau 29,982.27 21,703.06 13,614.71 

Licenses 982,526.15 1,046,136.98 1,022,516.76 

Oyster Tax 75,443.26 77,761.31 99,982.56 

Personal Property 481,996.40 473,286.73 414,247.66 

Penitentiary 137,556.00 133,936.01 136,033.53 

Railroads 782,090.39 780,541.17 713,684.28 

Express Companies 12,882.58 5,170.54 5,149.95 

Registration 51,090.00 49,820.00 46,250.00 

Real Estate 1,263,621.34 1,301,934.77 1,202,702.48 

Steamboat Cos 7,328.53 4,984.13 4,602.65 

Sleeping Cars 4,441.59 1,133.08 949.34 

Telegraph and Telephone.. 44,587.46 41,701.36 38,072.63 



Total $5,176,030.63 $5,223,994.92 $4,952,054.64 

Miscellaneous 360,450.41 302,621.51 298,414.03 



$5,536,481.04 $5,526,616.43 $5,250,468.66 



REPORT ON MILIv TAX 13 

A portion of this revenue may be divided as follows : 

Taxes on corporate business, including franchise, 
charters, public service and transmission com- 
panies $1,338,367.54 

Percentage .241 

Taxes on business non-incorporate 1,057,969.41 

Percentage .190 

Public Service and Transmission Companies 963,413.52 

Percentage .173 

Tax on Private Persons & Property 2,293,067.26 

Percentage .414 

Taxes assessed in 1908 but received 1909 applicable to public 
free school purposes. 

1909 

Capitation Tax $ 432,562.00 

Real Estate Tax 414,077.43 

Personal Property Tax 160,151.50 

Banks, Taxes on Shares 37,054.51 

Railroads and Canals, Tax on 91,809.20 

Steamboats, tax on 1,243.76 

Express Companies, tax on 56.32 

Telegraph and Telephone Companies 2,555.72 

$1,139,510.44 

Ninety percent of which is applicable to public free 

school purposes $1,025,559.40 

Exclusive of the capitation tax the total taxes from the above 
sources amount to $2,720,155.95 or .473 of the total revenue of 
the State. 

It thus appears that with a total revenue during 1909 of 
$5,536,481.04, private persons and property in Virginia paid in 
income, inheritance, personal property, real estate and poll taxes, 
41 ^o of the entire revenue of the Commonwealth; incorporate 
business paid 24.1 ^, non-incorporate business paid 19 ^ and 
the public service and transmission companies paid 17.3 ^. 
These figures and proportions must be kept in mind as the mill 
tax would apply only to private persons and property. 

If a mill tax is adopted, it will be seen from the foregoing, 
that the school revenues would be derived from a little less than 



14 REPORT ON MILL TAX 

half the sources of revenue in the State. After a study of all 
the sources of revenue and the financial policy most likely to be 
pursued in the future in Virginia, I am of the opinion that these 
sources of revenue will contribute a more stable and elastic 
support, and are much more liable to increase. An application 
of the practice of a full valuation of real property, more fre- 
quent assessments, and the physical valuation of railroads, to- 
gether with a saner method of finding intangible property and 
assessing personal property, will before very long, in my judg- 
ment, prevail in Virginia, and when it is applied, there will be 
produced a much larger revenue from each of these sources 
with perhaps one exception. The increased revenue thus pro- 
duced will most likely result in a reduction of the rate of tax- 
ation, but when that does occur, the millage rate adopted can be 
reduced, if it is thought wise, in the same proportion as the 
regular rate is lowered. 

The other sources from which the state now derives more than 
half its revenue are liable to much greater fluctuation, because 
most dependent upon general financial conditions. Financial 
panics cause a great decline in them, but on the other hand a 
period of great prosperity largely increases them. Experience 
shows that the revenue from corporations and from income is 
subject to more unexpected fluctuations than from the sources 
on which the mill tax would be based. 

For these reasons, although at first inclined to prefer the 
method of setting aside a definite percentage of the total gross 
revenues of the state for educational purpose, I am led to the 
conclusion that to provide a basis of financial support for the 
State System of Schools, — The Elementary Schools, The High 
Schools, The Normal Schools, and the Institutions for Higher 
Instruction — a basis which shall be at once sufficient for their 
present needs, stable for the future, and self-adjusting in that 
it broadens with the growth of the State in wealth and re- 
sources, as well as the future growth and needs of the institu- 
tions themselves, I recommend that there be set aside from the 
annual revenues of the State a sum equivalent to two and one- 
third mills on the taxable property of Virginia from which now 
the school revenue is derived, which shall be in lieu of the 
present school tax and all the regular, annual appropriations for 



REPORT ON MIIvIv TAX 



15 



maintenance heretofore made for this purpose from the State 
Treasury, except of course the capitation tax and the proceeds 
of the Literary Fund. 

The following tables are suggestive of the way in which the 
revenue from the tax might be distributed. I take it, however, 
that a final apportionment, and in fact the exact amount of the 
mill tax, cannot be arrived at until after a conference with the 
heads of all the institutions concerned. 

The report of the State Auditor, too, for 1910, which will 
soon be available, may change the figures somewhat. 



TABLE 1. 

To exhibit the precise effect of these recommendations the 
following TABLE OF STATE SCHOOL ANNUITIES has 
been prepared on the assumed basis of $750,000,000 of taxable 
values, which allows about the usual percentage of increase over 
1908, when they were $668,000,000. 

Present Prospective Percent. 

Annuity Annuity Education 

1909-10 1911-12 Fund 

PUBUC ElvEMENTARY SCHOOLS : 

Present annuity from 10c tax $ 725,443 750,000 

Special appropriations 475,000 475,000 

$1,200,443 $1,225,000 70 

Public High Schools: 100,000 113,750 6^ 
Normal Schools : 

Farmville 50,000 52,500 3 

William and Mary 40,000 43,750 7.^2 

Fredericksburg- 30,625 1^ 

Harrisonburg 15,000 30,625 1^ 

Petersburg 20,000 21,875 1^ 

Radford 30,625 1^ 

Institutions for Higher Instruc- 
tion : 

Virginia Military Institute 40,000 43,750 2^/^ 

Virginia Polytechnic Institute 66,750 70,000 4 

University of Virginia 80,000 87,500 5 

Totals $1,612,193 $1,750,000 100 



16 REPORT ON MII,L TAX 



TABLE 2. 

If the revenue for the pubHc elementary schools be raised in 
the manner now prevailing, the exhibit would be as follows ; if 
^ of a mill were levied : 

Present Prospective Percent. 
Annuity Annuity Education 

PuBuc High SchooIvS : $100,000 

Normal Schooi^s: 

Farmville 50,000 

William and Mary 40,000 

Fredericksburg 

Harrisonburg 15,000 

Radford..... 

Petersburg 20,000 

Institutions for Higher Instruc- 
tion: 

Virginia Military Institute 40,000 

Virginia Polytechnic Institute .... 66,000 

University of Virginia 80,000 



Totals $411,000 





Fund 


$119,812.50 


22^ 


54,581.25 


10^ 


39,937.50 


7/2 


30,618.75 


5H 


30,618.75 


5H 


30,618.75 


m 


23,962.50 


W2 


45,262.50 


8^ 


69,225.00 


13 


87,862.50 


16^ 


$532,500.00 


100 



TABLE 3. 

Alternate plan based on the distribution of one-third of the 

gross revenues of the State which, estimating the gross re- 
ceipts at $5,600,000, would yield in round numbers $1,860,000. 

Present Prospective Percent. 

Annuity Annuity Education 

PuBUC Ei^Ementary Schooi,s: 1909-10 1911-12 Fund 

Annuity $ 725,443 $ 750,000 

Special Appropriations 475,000 552,000 

$1,200,443 $1,302,000 70 

PuBi^ic High Schooi^s: 100,000 125,550 6^ 
Normal Schools: 

Farmville 50,000 55,800 3 

William and Mary 40,000 41,850 2J4 

Fredericksburg 37,200 2 

Harrisonburg 15,000 37,200 2 



REPORT ON MII,L TAX 17 







37,200 


2 


20,000 




23,250 


154 


40,000 




41,850 


2^ 


66,750 




69,750 


33/4 


80,000 




88,350 


43/4 


^1,612,193 


$1> 


,860,000 


100 



Radford 

Petersburg 

Institutions for Higher Instruc- 
tion: 

Virginia Military Institute 

Virginia Polytechnic Institute.... 
University of Virginia 



The first of these suggested plans commends itself most to 
my judgment, because, 

a. It includes the whole educational system and thus recognizes 
its unity. 

b. The income, I am led to believe, would be more stable, be- 
cause uniform and less subject to violent fluctuations. 

c. It would still leave for the support of the public elementary 
schools, the capitation tax and the revenues from the Literary 
Fund. 

d. A portion of the general revenue is already specifically set 
aside for Pensions, The Militia and possibly other purposes, 
and there would, therefore, be more legal and political bar- 
riers to overcome if an attempt were made to use a certain 
percentage of the gross revenues. 

e. There are possibilities of a larger increase in revenues, be- 
cause the property on which the mill tax will be based is 
most likely to increase in real and assessed valuation. 

If the first plan is adopted, the distribution of the educational 
fund would be grouped as follows ; 

Public Ei^Ementary SchooIvS : 70 percent 

PuBivic High Schools: 65^ percent 

Normal Schools: 

Farmville 3% 

William and Mary 2 1/2% 

Fredericksburg 1 3/4% 

Harrisonburg 1 3/4% 

Radford 1 3/4% 

Petersburg 1 1/4% 12 percent 



18 REPORT ON MILL TAX 

Institutions for Higher Instruction: 

Virginia Military Institute 2 1/2% 

Virginia Polytechnic Institute 4% 

University of Virginia 5% 11 per cent 

In all the groups I have included Fredericksburg Normal and 
Radford Normal. Until they need the amount of annuity speci- 
fied, provision can be made in any bill proposed that the revenue 
be used for building purposes. In reality, an annuity for a 
Woman's College should be included for it will in my opinion 
surely soon be needed. 



Exhibit A 

EXTRACTS FROM LETTERS 



.OF.. 



University Presidents and Others 

Regarding a Mill Tax for 
Educational Institutions . . . 



Mr. M. Henderson, secretary of the Regents of the University 
of California, by direction of President Benjamin I. Wheeler, 
writes as follows : "In 1877 the Legislature passed an act pro- 
viding for a tax of one cent on each one hundred dollars of 
assessed valuation. In 1897, it having developed that assess- 
ments had not increased in proportion to the increase in the 
wealth of the State nor in proportion to the growth of the 
University and the growth of the needs of the University, the 
Legislature passed a second act levying an additional tax of one 
cent on each one hundred dollars of assessed valuation. At the 
last session of the Legislature in 1909, the Legislature repealed 
the two acts mentioned above and adopted an act levying a tax 
of three cents on each one hundred dollars of assessed valuation. 
Three-fourths of the yield of this tax is unrestricted as to use; 
one-fourth must be used for improvements permanent in char- 
acter. 

*'The bill providing for this tax of three cents on each one 
hundred dollars continues to operate until such time as the Leg- 
islature may repeal it. It would be very much more difficult, 
however, to repeal such a law than it was to pass it in the first 
instance. 

"The mill tax seems exceedingly valuable to a university be- 
cause it assures a steady and constant income, and an income 
certain to grow somewhat from year to year and to grow very 
considerably when long periods of time are taken into con- 
sideration " 

President Charles VanHise of the University of Wisconsin 
writes in reference to the mill tax : "The fundamental argu- 
ment which we used in its advocacy was that in a rapidly grow- 
ing state a fixed appropriation continually becomes inadequate 
because the university grows in proportion to the growth of the 
state. I showed that this theory was in accordance with the 
facts, that the growth of the university has been more rapid 
than the increase in income, and that in consequence, it was be- 
coming increasingly difficult to keep our work up to a high 
standard. These ideas were finally accepted by the Legislature 



22 REPORT ON MILI. TAX 

and we were granted two-sevenths of a mill tax, which, when 
it went into effect, raised our income approximately $200,000 
per annum. Since that time the increase in assessed valuation 
of the property of the state has increased our income annually 
not less than $33,000, and the increase in 1908 is 63,000." 

Dr. Webster J^slerrifield, for twenty-five years president of the 
University of North Dakota, writes as follows : "I was chiefly 
responsible for the passage of the mill tax in North Dakota for 
the support of the University and other state schools, and was 
at the head of the University of North Dakota during ten years 
of operation under the tax. My opinion as to the superiority of 
the mill tax is (1) Certainty; (2) Avoidance of unseemly 
scrambles between the several state schools before the appro- 
priation committees of the Legislature; (3) Increase of in- 
come from year to year fairly proportional to the growth of the 
state in wealth and the growth of the University in numbers 
and needs. Before the passage of the mill tax we never knew be- 
forehand whether or not the University was going to receive a 
fairly adequate appropriation for maintenance. There was a 
recurrence each biennial period of unpleasant rivalry between 
the different state schools. There was need of almost constant 
and always undignified lobbying throughout the session of the 
Legislature. I am confident, too, that the university has 
habitually received a larger annual income from the tax for 
mxaintenance than it could have hoped to receive during the same 
time from direct biennial appropriations. Few members of the 
Legislature of 1899 which passed the mill tax realized or ven- 
tured to say how large an income it would bring to the several 
state schools. Almost every year the Legislature is raided by 
special institutions for appropriations. They maintain skilled 
lobbies, and but for the presence on the statute books of the 
permanent mill tax, would often divert to themselves a por- 
tion of the state's total income which now goes to the schools. 
After ten years of operation under the fixed appropriations for 
state schools, neither the schools nor the members of the Legis- 
lature would be willing to go back to the old system. The leg- 
islators themselves are spared almost endless 'pulling and haul- 
ing* by individuals whom some of them are fond of alluding 



REPORT ON MILIv TAX 23 

to as 'those educational sharks/ and are measurably relieved of 
the importunities of a most persistent, if not the most numerous 
and unscrupulous class of lobbyists. For the school men, too, 
the gain is enormous. I was conscious of an immediate and 
tremendous gain in self-respect after being relieved of the neces- 
sity of engaging in a biennial scramible for existence, institu- 
tionally speaking. And if now the fixed tax for maintenance 
could be supplemented by another for building purposes, I 
should feel that the life of a state university, president is as 
nearly ideal as is often realized on this earth." 

Dr. J. H. Worst, president of the North Dakota Agricultural 
College, whose institution is partly supported by a tax of one- 
fifth of a mill, says : "I consider the mill tax far and away, 
more satisfactory than any other form of appropriation, 
especially for maintenance. It insures a definite income increas- 
ing with the state's increase in wealth and taxable property. 
Should additional appropriations be required, it is not difficult to 
determine the amount necessary. Furthermore, when a mill tax 
is properly adjusted it saves the corraption of what is usually 
termed 'log-rolling' among politicians representing different sec- 
tions of the state. North Dakota would not think of repeal- 
ing the mill tax system foi the maintenance of our educational 
institutions." 

Dr. Cyrus Northrop, president of the University of Min- 
nesota writes that his institution has been supported by a mill tax 
of twenty-five hundredths of one mill per dollar since 1897-8, 
and it will probably never be repealed. 

It has frequently been, in the past, exceedingly difficult to 
secure needed direct appropriations by the Legislature, while a 
mill tax covering several times the amount of direct appro- 
priations has been passed without much difficulty. 

A mill tax once passed generally continues for a series of 
years thus avoiding the necessity whenever the Legislature meets 
of resorting to combinations — "you support my measure and I 
will yours" — which are sometimes of questionable character, in 
order to secure legislation which is absolutely necessary. 

A mill tax is seemingly so slight that it does not raise the 
violent opposition to be found in an attempt to pass direct ap- 



24 REPORT ON MII,L TAX 

propriations, and again the proceeds of the mill tax continue to 
increase as the property of the state increases. The mill tax in the 
state of Minnesota has doubled in the last ten years — $135,000 
in 1900, $265,000 in 1910. 

Dr. J. K. Patterson, president of the State College of Kentucky 
whose institution has been supported by a mill tax of one- 
twentieth of a mill for the past twenty-seven years, writes that 
he prefers this method of support because it is less subject to 
the caprice of the Legislature. He states that the mill tax is 
not likely to be repealed in Kentucky. 

Dr. Charles A. Lowry, president of the State Agricultural 
College, Fort Collins, Colorado writes that the mill tax for his 
institution and that of the other state institutions is for sup- 
port, and buildings if the money is not all needed for support. 
The advantage of the mill tax lies in the fact that the author- 
ities always have a definite basis to figure on. The Legislature is 
more or less a changeable body, and unless a definite amount 
is provided, the authorities and the state institutions never know 
what to count on. Very often hardly enough is appropriated 
for maintenance. Again a great deal is appropriated so that 
work can be started which must later be given up when an 
economical Legislature comes into power. 

Mr. E. W. Stanton, secretary of Iowa State College, writes 
that his institution received the proceeds of a tax of one-fifth of 
a mill for building purposes which yielded in 1909-10 $135,000. 
The tax runs for five years, but has been renewed twice, and 
he hopes to have it extended for another five year period in 
1912. Since the first tax came into efifect in 1900, the total in- 
come by the close of 1912 will be something more than 
$1,400,000. The buildings on the college grounds are inven- 
toried at something over $1,600,000. The millage tax is re- 
sponsible for more than $1,000,000 of this value. Prior to 1900 
the department buildings were temporary structures utterly in- 
adequate to meet the growing needs of the institution. The 
millage tax lifted the college out of these temporary buildings 
into fireproof durable structures that last for generations. This 
result could not have been accomplished by direct appropri- 



REPORT ON Mllvly TAX 25 

aliens from the general revenues of the state. The millage tax 
enables trustees and faculty to plan wisely in the matter of 
buildings, and has helped in no small measure to the sym- 
metrical development of the institution as a whole. If there is 
no direct millage tax for the institutions, the fund for their sup- 
port must be taken out of the general revenues, and this is al- 
ways insufficient. Under the tax method the income gradually 
increases with the increase of the wealth of the state. 

Dr. George MacLean, president of the State University of 
Iowa writes : "My experience as chancellor of the University 
of Nebraska as well as president, leads me to say that the Vir- 
ginia Education Commission certainly makes no mistake in 
recommending to the General Assembly a millage tax for the 
support of the state education institutions. During my chancel- 
lorship in Nebraska from 1895 to 1899 a tax of one mill for the 
support of the University was raised as a substitute for the ir- 
regular, special and lump appropriations. The times, on account 
of the panic of '93 in connection with the drought in Nebraska, 
were very hard. The university, it was afterwards discovered by 
financiers, had strengthened the credit of the citizens of the state 
abroad so that time was given on overdue mortgages because of 
the character of the people that would maintain so good a uni- 
versity. It was seen that the fluctuating appropriations and the 
impossibility of having far-seeing policies under the old system 
made a millage a more scientific and practical method of support. 
My successor. Chancellor Andrews, told me that in the period 
that Nebraska suffered from politicalism, the estabHshment of 
the millage tax had been the salvation of the university. I wish 
for the sake of Virginia that your committee's recommendation 
may be adopted." 

Dr. MacLean further states, "The greatest benefit of the mil- 
lage to the university is that the public was impressed with the 
buildings. As in the development of the real work of the uni- 
versity sometimes the building era of the university is at the 
expense of its school work. The tide of migration of Iowa 
students outside of the state has been turned by the sight of 
the buildings and by knowledge of the state's consistent policy 
tinder the millage of equipping the institutions. In short one 



26 REPORT ON MILIv TAX 

of the original, chief factors contributing to the recognition of 
the university has been due to the millage tax." 

Mr. A. M. Brown, secretary of the Michigan Agricultural 
College writes for Dr. Snider that the law provides that after 
the current expenses of the institution are paid, any surplus re- 
maining of this tenth mill tax can be utilized for buildings or 
any other special purposes. "We very much prefer the mill 
tax to special appropriations for the fact that it allows the in- 
stitution to look ahead and make definite provisions for the 
future. The chief difficulty arises from the fact that the mill 
tax appropriation had from year to year to be increased in order 
to provide the necessary funds to take care of the growing in- 
stitution." 

Dr. Edmund J. James, president of the University of Illinois, 
says: "The University of Illinois is entirely dependent for 
every dollar of its income upon the Legislature of the State of 
Illinois. This is, in my opinion, a bad system. Our system of 
education in the State of Illinois may be characterized as con- 
glommerate, that is, its complex of higher institutions is a mere 
aggregate with no organic connection. I congratulate you on the 
great opportunity you have to inaugurate an ideal system. I re- 
gret that we have nothing that would be of any material benefit 
to you, nor, except as a suggestion of how not to do anything, 
have we any experience that would be of much benefit." 

Dr. Guy Potter Benton, president of Miami University says 
that the mill tax for the support of Miami University amounts to 
a permanent endowment with the state behind it. and gives us a 
sense of security for the future. 

Dr. W. E. Stone, president of Purdue. University says : "Our 
experience leaves no doubt in our minds as to the great ad- 
vantages of this forrn of support. We know definitely what to 
expect from year to year. There is practically no prospect of 
its ever being interfered with or repealed, and it gives stability 
to our business efforts which could not be expected at all did 
we depend upon the annual and biennial presentation of our 
needs to the Legislature." 



REPORT ON Mlhh TAX 27 

Hon. Allen R. Foote, president of the International Tax Com- 
mission writes: "Better provision for education is one of the 
most important demands upon tax payers in each state. These 
funds should be obtained from sources that are absolutely re- 
liable and the expenditure of the money should be made abso- 
lutely certain so that those who are responsible for the educa- 
tional system of the state can make their plans with reference 
to permanent conditions. 

"When a specified source is set apart to provide revenue for 
educational purposes, the source to be selected should be one 
that will grow in harmony with the growth of the state and with 
the growth of educational requirements. 

"Personally I am in favor of having all governments, state and 
local, financed by the use of a budget system. In doing this I 
would favor the creation of educational funds to be built up 
from sources so that the fund would always contain a sufficient 
provision for the educational needs of each succeeding year. 
This would enable those responsible for the management of the 
educational system of the state to finance their system on the 
basis of stable conditions. 

"Educators generally prefer to have a fund for the support of 
the educational system that is not dependent upon annual or 
biennial appropriations by the Legislature." 

Mr. W. L. Stockwell, Superintendent of Public Instruction of 
North Dakota, writes as follows : "Your favor of the 4th is at 
hand. I am sending you, under separate cover, a copy of our 
last report. I am not sure that you will find much in it bearing 
on the subject which your commission has in hand, however, I 
may say that there is established in this state a one mill tax on 
all property for the purpose of maintaining our state educa- 
tional institutions. This is divided as follows: 33 hundredths of 
a mill to the University, 20 hundredths to the Agricultural Col- 
lege, 13 hundredths to the State Normal School at Mayville, 6 
hundredths to the School for the Deaf, 2 hundredths to the 
School of Forestry, 4 hundredths to the School of Science and 
7 hundredths to the Normal and Industrial School. 

"These funds are entirely for the purpose of maintenance. 
All permanent improvements are made out of direct appropri- 



28 REPORT ON MILI. TAX 

ations by the Legislature. The proceeds of this one mill tax to- 
gether with the income derived from the landed endowment of 
these institutions provides an income which is constantly increas- 
ing. In addition to this one mill tax there is a two mill tax 
levied upon all property, which is apportioned among the com- 
mon schools of each county in accordance with the number of 
children between the ages of six and twenty. 

This amount, together with the land set aside for the common 
schools, together with the local taxation in each district, pro- 
vides the revenue for maintaining the common schools. The 
two mill tax for this year will amount to about $560,000. The 
income from the landed endowment belonging to the common 
schools, for the past school year has amounted to $1,199,000. 
And our fund is yet in its infancy. 

''I sincerely hope that it may be possible for your commission 
to persuade the Legislature to see the wisdom of providing, not 
only a yearly tax for maintenance but also a small tax for build- 
ing purposes. In this way the management of an institution can 
make defirite plans for the future, but if an institution is de- 
pendent upon the whim of a legislature every two years, there 
can be little or no system in the development of the institution." 

President James B. Angell of the University of Michigan 
says : "For our purpose I may thus explain the superiority of 
the mill tax over either biennial appropriations or direct appro- 
priations for a term of years. To carry on a university wisely 
it is necessary to have a fixed policy which shall be in force for 
an indefinite future. When we had specific appropriations for 
separate objects, as we formerly did, this inconvenience was ex- 
perienced. Frequently before the time for which it was made 
had elapsed, we found that some partial modification of the 
use of the appropriation would be better than that which had 
been specified in the act. Furthermore, in securing the appro- 
priation it is necessary to go into long details which were tedious 
both to ourselves and to the Legislature in explaining the use- 
fulness of each one of the objects named, and sometimes it was 
not easy to make all the details of the university objects com- 
prehended by all the legislators. It was far simplier and easier 
to make them understand in general that a considerable sum was 



REPORT ON MIIvIv TAX 29 

needed for carrying on so large an institution and that it was 
wiser to leave the exact distribution of it to the authorities who 
were making all the time a careful study of the problem. 

"The wisdom of this course has been so obvious that other 
states have followed our example to a greater or less extent, 
notably Wisconsin and California/' 

Hon. A. S. Draper, Commissioner of Education, New York, 
writes : ''With the steady development of a democratic state all 
manner of private and individual interests want to do things and 
they find their opportunities. The worthy and the unworthy 
have their chance. The activities of the best of people often re- 
sult in unnecessary duplication of instrumentalities, and there- 
fore, in unnecessary cost and waste." 



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